from The Hutchinson Unabridged Encyclopedia with Atlas and Weather Guide

British Labour politician, prime minister and party leader 1976–79. He became prime minister in April 1976 after the unexpected retirement of Harold Wilson and he headed a minority government, which stayed in power from 1977 through a pact with the Liberal Party. A Labour moderate, he held power at a time when trade unions and the party's left wing had increasing influence, and he was forced to implement austerity measures agreed with the International Monetary Fund (IMF). Callaghan was previously chancellor of the Exchequer 1964–67, home secretary 1967–70, and foreign secretary 1974–76.

As chancellor of the Exchequer 1964–67, he introduced corporation tax, capital gains tax, and selective employment tax, and resigned after being forced to devalue the pound sterling. As foreign secretary in 1974, Callaghan renegotiated the UK's membership of the European Community (now the European Union). His 1976–79 minority government gradually lost strength through by-election defeats and was faced with high levels of inflation, rising unemployment, and industrial unrest. From 1977 Labour stayed in power through a pact with the Liberals. Strikes in the so-called ‘winter of discontent’ 1978–79 led to the government losing a vote of no confidence in the Commons in March 1979, forcing Callaghan to call an election in May 1979, when his party was defeated by the Conservatives, led by Margaret Thatcher.

Callaghan was born in Portsmouth, England, and educated at Portsmouth state schools. He became a tax officer in the Inland Revenue and trade union official. After war service in the navy he entered Parliament as Labour MP for South (later Southeast) Cardiff in 1945, and held junior office from 1947 until 1951. Callaghan subsequently made a considerable reputation as chief opposition spokesperson on financial affairs. Between 1970 and 1974 he was successively opposition spokesperson on home affairs, employment, and foreign and Commonwealth affairs. In March 1974 he became secretary of state for foreign and Commonwealth affairs, holding that office until he succeeded Harold Wilson as leader of the Labour Party and prime minister in April 1976. Between 1967 and 1976 he was treasurer of the Labour Party and was chair of the party 1973–74. Callaghan was the first prime minister since Ramsay MacDonald to be forced into an election by the will of the Commons. In 1980 he resigned the party leadership under left-wing pressure, and in 1985 announced that he would not stand for Parliament in the next election. He was created a life peer in 1987.